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Arbitration Cases Weekly Round-Up: 3 July To 9 July, 2022
Parina Katyal
10 July 2022 7:00 PM IST
Bombay High Court: Invocation Of Arbitration Has To Be In Clear Terms; Merely Stating Claims Would Not Suffice: Bombay High Court Case Title: M/s. D.P. Construction versus M/s. Vishvaraj Environment Pvt. Ltd. The Bombay High Court has ruled that invocation of arbitration has to be in clear terms, as specified in Section 21 of the Arbitration and Conciliation Act, 1996 (A&C...
Bombay High Court:
Case Title: M/s. D.P. Construction versus M/s. Vishvaraj Environment Pvt. Ltd.
The Bombay High Court has ruled that invocation of arbitration has to be in clear terms, as specified in Section 21 of the Arbitration and Conciliation Act, 1996 (A&C Act), and that a mere reference to the claims and disputes sought to be raised by a party, and the existence of an arbitration clause, would not itself mean that arbitration has been invoked by such a party.
The Single Bench of Justice Manish Pitale observed that Section 21 of the A&C Act specifically refers to a request for the dispute to be referred to arbitration as regards the commencement of the arbitral proceedings. Hence, the Court ruled that unless there is a request by a party that the dispute is to be referred to arbitration, merely stating the claims and disputes in a notice would not suffice.
Case Title: Priya Malay Sheth versus VLCC Health Care Ltd.
Citation: 2022 LiveLaw (Bom) 242
The Bombay High Court has reiterated that whenever a place is designated as the "venue" of the arbitration proceedings in its entirety in an Arbitration Clause, the said place would necessarily be the "seat" of the arbitral proceedings.
The Single Bench of Justice G.S. Kulkarni held that such part of the Arbitration Agreement wherein the parties had agreed upon the venue of the arbitration proceedings, would be required to be read as distinct and independent from the arbitral mechanism agreed between the parties.
Calcutta High Court:
Case Title: Lindsay International Private Limited versus IFGL Refractories Limited
Recently, the Calcutta High Court has discussed the concept of interim award under the Arbitration Act. The court was hearing a plea by Lindsay International seeking to set aside an order which the petitioners pleaded was an interim order in terms of the Act.
Single judge bench of Justice Moushumi Bhattacharya held that the impugned decision did not qualify to be nor did it have the trappings of an interim award under Section 2(1)(c) or Section 31(6) of the Arbitration Act, 1996; hence, the impugned order could not be challenged under Section 34 of the Arbitration Act.
Delhi High Court:
Case Title: DSIIDC versus H.R. Builders
Citation: 2022 LiveLaw (Del) 614
The High Court of Delhi has held that the objection regarding the excepted matter would be an after-thought if the same was not raised before the arbitral tribunal.
The Division Bench of Justice Mukta Gupta and Justice Neena Bansal Krishna relied on the judgment of the Supreme Court in J.G. Engineers versus UOI (2011) to hold that only the question of determination of the quantum of compensation for delay is an excepted matter and the issue if the compensation is payable is an arbitrable matter.
Case Title: Ircon International versus Reacon Engineers (India) Pvt. Ltd.
Citation: 2022 LiveLaw (Del) 607
The High Court of Delhi has held that a challenge petition filed without impugned award, vakalatnama, and verification is non-est in law.
The Single Bench of Justice Vibhu Bakhru was dealing with a case where the petitioner had initially filed a challenge petition under Section 34 of the A&C Act without the impugned award, vakalatnama, and the statement of truth.
Himachal Pradesh High Court:
Case Title: State of H.P. versus BMD Pvt. Ltd.
The Himachal Pradesh High Court has held that a party cannot file a petition under Section 11 of the A&C Act after it has already submitted to the jurisdiction of the arbitrator by way of filing a petition under Section 11 of the A&C Act.
The Single Bench of Justice Sandeep Sharma held once the petitioner has failed to respond/object to the arbitration notice wherein the name of the arbitrator was mentioned within 30 days, there would be deemed consent on its behalf and it cannot object to the appointment of the named arbitrator at a later stage.
Karnataka High Court:
Case Title: Masters Management Consultants (India) Private Ltd. versus Nitesh Estates Limited
The Karnataka High Court has ruled that since the agreement between the parties provided for a 'non-binding' arbitration, there was absolutely no intention of the parties to enter into an arbitration agreement and that the said agreement could not be termed as an arbitration agreement.
The Single Bench of Justice Sachin Shankar Magadum held that since under the relevant clause in the agreement, the parties were at a liberty to initiate litigation before the Civil Court, therefore, the said clause clearly detracted from an arbitration agreement and hence, the recovery suit instituted by the petitioner before the lower Court was very much maintainable, and the lower court could not invoke Section 8 of the Arbitration and Conciliation Act, 1996 (A&C Act).
Case Title: Shriram City Union Finance Ltd. versus Mr. Donald Dayanand Donald
The Karnataka High Court has ruled that the date for the purpose of quantifying the stamp duty payable on an arbitral award under the Karnataka Stamp Act, 1957 is the date on which the award was signed.
The Single Bench of Justice S. Vishwajith Shetty held that since the amendment to Article 11(b) of the Schedule to the Karnataka Stamp Act was already in force on the date of passing of the award, the proper stamp duty required to be paid on the arbitral award was 0.75% of the value of the arbitral award.
Meghalaya High Court:
Case Title: M/s Maya Construction versus Union of India & Ors.
The Meghalaya High Court has ruled that in a case where the issue of whether the claim raised by a party is barred by limitation or not calls for an inquiry, the Chief Justice or his designate should allow the objection to be decided by the arbitral tribunal in accordance with law.
The Single Bench of Chief Justice Sanjib Banerjee held that though in an open and shut case where it is apparent that the claim can no longer be pursued, or where the request for setting up an arbitral tribunal is hopelessly barred by limitation, the Court may dismiss the petition for reference to arbitration; however, when an arguable case is made out and the issue of limitation calls for an enquiry, the Court should yield to the authority of the arbitral tribunal.
Case Title: North Eastern Electric Power Corporation Ltd. (NEEPCO) versus Patel-Unity JV
The Meghalaya High Court has held that a court exercising powers under Section 9 of the A&C Act cannot add conditions to an unconditional bank guarantee.
The Division Bench of Chief Justice Sanjib Banerjee and Justice W. Diengdoh held that mere plea of fraud would not be a ground for the court to stay invocation of an unconditional bank guarantee unless a strong prima facie case is made out on such a ground.
Rajasthan High Court:
Case Title: Vimlesh Bansal versus Ashok Kumar
The Rajasthan High Court has held that a second arbitration application would be non-maintainable when the order of the arbitrator terminating arbitral proceedings under Section 32(2)(c) was not challenged under Section 14(2) of the A&C Act.
The Single Bench of Justice Pankaj Bhandari held that the legal maxim 'Vigilantibus Non-Dormientibus Jura Subveniunt' which means that 'the law assists only those who are vigilant and not those who sleep over their rights' would squarely apply to a situation where the petitioner slept over its right to challenge the order of termination but filed a second application for appointment of arbitrator.
